The top three ETFs in the FlexShares lineup that picked up the most recent assets in March are largely funds that offer high returns, demonstrating investors’ desire for yield.
the FlexShares iBoxx 3 Year Target Duration TIPS Index Fund (TDTT) had the most inflows in March, with $455 million in one month and $566 million year-to-date, according to the ETF database.
TDTT, which manages $2.05 billion in assets, offers exposure to short-term TIPS, bonds issued by the US government whose principal adjusts according to certain measures of inflation.
TDTT is often used to protect portfolios against anticipated increases in inflationary pressures, as it includes securities that are relatively close to maturity and have minimal credit risk; it serves as a “risk” tool for those anticipating chaos in the markets, according to ETF Database.
The second place is occupied by the 8.25 billion dollars FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR), which took in $229 million in March admissions, totaling $318 million in admissions year-to-date.
GUNR is one of the more unique products in the ETFdb category of commodity stocks; the fund focuses on the “upstream” part of the natural resources supply chain, maintaining significant exposure to the water and timber industries as well as positions in companies engaged in the production of energy, metal mining and agriculture, according to the ETF database.
GUNR is heavily biased towards mega-cap stocks, including big oil companies and big mining companies. GUNR can help investors gain “indirect” exposure to commodity prices. According to ETF Database, since the profitability of component stocks tends to move in unison with the spot prices of the underlying resources, this fund should perform well when natural resource prices are rising.
the FlexShares High Yield Value-Score Bond (HYGV) Index Fund saw $155 million in inflows in March, putting it in third place. The fund has total assets of $865 million and has received $256 million in inflows since the start of the year, thanks to investors looking to add income while avoiding the riskiest junk debt.
HYGV tracks a proprietary index of high yield bonds sorted by value and quality. HYGV’s methodology rates issuers based on factors such as valuation, creditworthiness, management effectiveness and profitability. Securities are selected for their liquidity and the portfolio imposes caps on individual bonds, issuers, sectors, duration, turnover and credit rating, according to the ETF database.
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